ISLAMABAD: A U.S. appeals court on Thursday reinstated former President Donald Trump’s broad tariff policy, reversing a trade court decision that had blocked most of the levies just a day earlier.
The legal back-and-forth has left global markets confused and investors uncertain about what to expect next from Washington’s erratic trade agenda.
The move reignites tensions in global trade circles and brings further volatility to financial markets, already shaken by a series of abrupt and often reversed economic policies under Trump’s renewed leadership.
Thursday’s reinstatement of tariffs follows a federal court ruling on Wednesday that declared many of Trump’s duties unlawful, stating that the former president had overstepped his constitutional authority.
Market Reaction and Investor Sentiment
Although the latest ruling effectively revived Trump’s tariffs, equity markets appeared largely muted. The lack of strong reaction suggests that investors may have become desensitized to the administration’s tariff whiplash, which has become a recurring theme.
Analysts attributed the calm to expectations that the administration may again delay or water down implementation.
Despite this, Wall Street continues to digest the uncertainty. Since Trump’s April 2 “Liberation Day” announcement — where he proposed sweeping tariffs as part of a nationalist economic strategy — the S&P 500 index has risen 4.1%, and European markets have gained around 2.0%.
Meanwhile, gold has surged 5.9%, the dollar index has fallen by 4.4%, and 10-year U.S. Treasury yields have climbed to about 4.4%, reflecting a mix of risk aversion and inflation concerns.
Financial media have even coined a new acronym — TACO, or “Trump Always Chickens Out” — to describe Trump’s pattern of aggressive policy announcements followed by backtracking. When questioned about the term, Trump called it a “nasty” remark, defending his tactics as part of “negotiation.”
Legal Challenge and White House Pushback
The now-reversed trade court ruling came from a three-judge panel at the Court of International Trade, which found that Trump’s tariff regime went beyond the powers granted to the executive branch.
The decision would have halted most tariffs imposed since Trump’s initial term in office. But within hours, administration lawyers filed an appeal, prompting Thursday’s reversal and a 10-day window to reimpose the duties.
White House spokesperson Kush Desai criticized the court’s earlier ruling, saying, “It is not for unelected judges to decide how to properly address a national emergency.”
However, analysts say the legal battle underscores deeper uncertainties surrounding Trump’s trade philosophy and the extent of presidential power. “These court rulings are just headlines unless they result in consistent policy enforcement,” said Adam Sarhan, CEO of 50 Park Investments. “If markets don’t crash, they won’t care.”
Trump’s use of tariffs as a tool of economic negotiation has faced both domestic and international scrutiny, especially as trading partners weigh the impact of sudden and sweeping changes.
With the reinstatement now in effect, investors and global allies alike will be watching closely for the next move — or reversal — from the White House.
